Until recently, software as a service (SaaS) companies relied on their subscription billing platform to manage their invoices and recurring charges. However, a new player has come into the game. As the owner of a SaaS company, you need to understand how intelligent or dynamic routing is changing the rules forever.

What is payment routing?

Intelligent payment routing is a sophisticated system that uses data analysis to send payments to the best payment processors, acquirers, or gateways. While traditional routing relied on static and immutable pathways, this new solution constantly adapts payment channels.

There are many crucial factors that smart routing uses to determine a payment’s ultimate destination. These include card issuer preferences, transaction currency, geolocation, fraud and risk scoring, and acquirer performance metrics. Because of this method’s flexibility, payment approval rates are often higher, costs are lower, and security is more robust. Considering these advantages, it is not surprising that SaaS companies are increasingly integrating it into their infrastructures.

Maximizing success rates

As with most businesses, problems with the payment process can lead to lost sales or, in the case of your SaaS company, dropped recurring billing customers. If you accept subscription payments, your priority should be to maximize success rates.

Instead of experiencing involuntary churn due to a failed payment, smart routing automatically retries it, often several times. It also uses factors like card type and location to choose the route with the highest success rate. This minimizes payment failures, simultaneously improving the subscriber’s checkout experience.

Cost savings

Because an intelligent system can be set to select the most cost-effective route, you will pay less to have your transactions completed. Additionally, your staff will no longer need to manually choose the best payment path or make payment retries, reducing your overhead costs.

Streamlining global payments

To succeed globally, you need to be able to support various payment methods and international currencies. With payment routing from your merchant provider, you will be able to do so while integrating with banks and financial institutions in other countries.

Outages and performance issues can be particularly disruptive in the global marketplace, often fatally eroding customer trust. Intelligent payment routing solves this problem by automatically switching to an alternate gateway or provider if performance issues arise. Thanks to smart payment routing, a single failure point will not disrupt your ability to complete payments and make a profit.

Informed business decisions

Smart payment routing platforms enable you to harness a wealth of payment transaction data. This includes insights into customer preferences, trends, and bottlenecks that hinder your SaaS processes. Using these insights, you can make better-informed decisions about future marketing campaigns, customer segmentation, and pricing.

Intelligent payment routing can be transformational for your SaaS company. It can maximize success rates and streamline global payments at an affordable cost using the power of data and analytics. With the enlightened forecasts and decisions that it will help you to make, your SaaS business can surpass its competitors.